The Advertising Standards Council of India (ASCI) has introduced new rules requiring brands to label AI-generated content in advertisements. Starting in three months, marketing campaigns using synthetic influencers or fabricated product demonstrations must clearly disclose their AI origin. This move aims to protect consumers from misleading marketing while keeping standard creative editing techniques exempt from the new requirements.
The Advertising Standards Council of India (ASCI) has formally released new guidelines aimed at increasing transparency in digital and traditional advertising. Effective three months from the September 29, 2026 announcement, all brands operating in India must provide clear disclosure for advertisements that rely heavily on artificial intelligence.
Scope and Compliance Requirements
The new policy focuses on synthetic content that could materially sway a consumer's purchasing decision. Under these rules, companies must clearly label materials featuring AI-generated influencers, digital likenesses of real people, or entirely fabricated product settings. If a consumer could be misled into believing an AI-generated scene is real, the brand is required to provide a disclaimer.
However, the guidelines include specific exemptions to avoid creating unnecessary hurdles for standard creative processes. Routine technical enhancements, such as color correction, lighting adjustments, noise reduction, and minor blemish removal, do not require disclosure. Additionally, utility-focused tools like automated subtitles and background decorative elements remain unaffected. This distinction is intended to target deceptive marketing practices rather than standard industrial editing techniques.
Impact on Marketing and Business Operations
For investors and market participants, this mandate represents a shift toward stricter governance of digital marketing assets. Large consumer-facing companies in sectors like fast-moving consumer goods (FMCG), e-commerce, and ed-tech, which frequently use sophisticated digital marketing tools, will need to audit their creative workflows.
Marketing departments must now ensure their content production partners—such as creative agencies and tech vendors—are prepared to comply with these labeling standards. Failure to disclose AI use or the misuse of technology could lead to regulatory scrutiny under the existing ASCI Code and the Central Consumer Protection Authority (CCPA) frameworks.
Managing Regulatory and Reputational Risk
The guidelines also serve as a reminder that labeling is not a 'fix-all' for unethical practices. The ASCI has explicitly reiterated that certain high-risk practices, such as deepfakes, unauthorized use of a person's voice or likeness, and fabricated testimonials, remain strictly prohibited regardless of whether an 'AI-generated' label is attached.
For companies, the primary monitorable in the coming months will be the adjustment of marketing strategies to ensure alignment with these rules. Investors may watch for how companies manage potential compliance costs and whether any marketing campaigns face regulatory friction once the three-month transition period concludes and the policy becomes fully enforceable.